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May 1, 2015, 2:36 PM
- Not surprisingly, LinkedIn (LNKD -20.5%) has received plenty of target cuts in response to the soft guidance (blamed on a variety of factors) provided with its slight Q1 beat. But no downgrades have arrived, and many on the sell-side are defending the professional social networking leader.
- Canaccord's Michael Graham: "Most factors impacting revenue appear temporary (FX, marketing solutions product transition, Talent Solutions sales force shuffle, lynda.com), while a display [ad] revenue headwind seems more secular ... We are encouraged by rapid growth in Sales Solutions, and believe any material weakness in the stock will likely provide a good long-term entry point."
- Wunderlich's Blake Harper: "The company saw its display ad business, especially in Europe, decline due to a shift to programmatic buying, but we remain bullish on the company’s potential to become a differentiated B2B content marketing platform ... Key metrics such as number of members, mobile visitors, and corporate talent solution customers were all in line with expectations..."
- Morgan Stanley estimates only 25% of LinkedIn's 2015 EBITDA guidance cut is due to fundamentals. Goldman thinks management is once more being conservative with guidance.
- Brean's Sarah Hindlian, whose decision to launch coverage at Sell in March is looking smart right now: "Premium Subscriptions/Sales Navigator missed by 3% [in Q1] while management talked down Sales Navigator ramp on the call and was mum on new customer signings ... we think the company is scrambling to buy growth and the [salesforce] re-org is due to product fatigue."
- Eric Jackson observes an industry shift towards programmatic (automated) ad buys has hurt not only LinkedIn's ad sales, but also Yahoo and Yelp's. He thinks Facebook (NASDAQ:FB) has been able to weather the storm thanks to its huge audience and targeting ability. "Facebook offers much more reach to advertisers. They're still willing to spend money elsewhere, but they won't pay up for it. If there are cheaper options available to them when they use programmatic, there's no reason for them not to use them." LinkedIn's unmatched professional data and favorable demographics could give it some room to differentiate in this landscape.
May 1, 2015, 12:45 PM
May 1, 2015, 9:13 AM
Apr. 30, 2015, 5:40 PM
Apr. 30, 2015, 5:00 PM
- In its Q1 CC prepared remarks (.pdf), LinkedIn (NYSE:LNKD) states its 2015 Market Solutions (ad) revenue will be hurt by "the continued migration to selling our new suite of products as well as more pronounced secular headwinds for traditional display-advertising." Twitter can sympathize.
- In addition, Talent Solutions (jobs) revenue saw "larger than normal Q1 [sales] account transitions" that increased churn and pushed out customer spending later into 2015, and will result in lower 2015 ratable revenue. The Marketing/Talent Solutions issues are expected to have a $30M 2015 revenue impact.
- Meanwhile, Lynda.com (about to be acquired) is expected to contribute $20M-$25M in 2015 revenue ($3M in Q2). However, LinkedIn expects a $15M impact (split between Lynda and Talent Solutions) from piloting different approaches to cross-selling products.
- As is the case for many peers, forex is also a big headwind: It's expected to have a $50M 2015 impact ($13M in Q2).
- Also: Heavy spending is impacting LinkedIn's bottom line: The company "significantly exceeded" its Q1 goals for engineering/operations hires, and also continues to rapidly grow its salesforce. GAAP costs/expenses rose 38% Y/Y to $655M.
- Talent Solutions revenue (62% of total revenue) rose 36% Y/Y in Q1; Marketing Solutions (19% of total) rose 38%, and premium subscriptions (19% of total) rose 28%. 39% of revenue was international. Talent Solutions accounts rose 35% Y/Y to nearly 35K.
- Shares have plunged to $191.88 AH.
- Earnings release, CC webcast, slides (.pdf)
- Earlier: LinkedIn beats estimates, but provides soft guidance
Apr. 30, 2015, 4:09 PM
- LinkedIn (NYSE:LNKD): Q1 EPS of $0.57 beats by $0.01.
- Revenue of $637.7M (+34.8% Y/Y) beats by $1.22M.
- Expects Q2 revenue of $670M-$675M and EPS of $0.28, below a consensus of $717.5M and $0.74.
- Expects 2015 revenue of $2.9B and EPS of $1.90, below a consensus of $2.98B and $3.03.
- Shares -20.1% AH.
Apr. 10, 2015, 2:01 PM
- "There are natural synergies we see with a combination, both strategic and financial, and we see an easy fit within LinkedIn’s (NYSE:LNKD) business model," writes Topeka's Victor Anthony, praising the Lynda.com acquisition. He admits the purchase is expensive - with Lynda having posted 2014 revenue of ~$150M, LinkedIn is paying 10x trailing sales - but (like others) also sees "a compelling opportunity" for cross-selling.
- Macquarie's Tom White observes LinkedIn could offer premium subscriptions that bundle Lynda's courses, and that it can use its data to pitch users on Lynda services. Cantor's Youssef Squali calls the purchase "another significant step toward building the world’s first economic graph."
- Re/code's Kurt Wagner notes Lynda could help LinkedIn make further inroads with students, and that the companies' missions align. "LinkedIn aims to connect people with job opportunities. Lynda.com aims to connect people with an education about those jobs."
- Discussing the deal with Wired, CEO Jeff Weiner argues there's an opportunity to translate Lynda's material into Chinese and other languages. He also suggests the content could boost LinkedIn's user engagement (a historical issue for the company), and that LinkedIn could use its publishing platform to identify potential Lynda contributors.
- Shares are up 4.8% since the deal was announced, and about $12 away from a high of $276.18. Q1 results arrive on April 30.
Apr. 9, 2015, 9:36 AM
- Lynda.com provides thousands of online courses and video tutorials (often tied to learning software programs or Internet services) via subscriptions sold to individuals, businesses, and academic and government institutions, and in partnership with professional "authors."
- The company was founded in 1995, has over 500 employees, and and had 2013 revenue of $100M (+43% Y/Y) while turning a profit. Its courses cover fields ranging from core business skills to photography/video to IT training.
- LinkedIn (LNKD -1.2%) is buying Lynda.com for $1.5B - 52% in cash, 48% in stock. The deal is expected to close in Q2. "Most" of the company's employees will be joining LinkedIn.
- LinkedIn CEO Jeff Weiner: "Lynda.com's extensive library of premium video content helps empower people to develop the skills needed to accelerate their careers. When integrated with the hundreds of millions of members and millions of jobs on LinkedIn, lynda.com can change the way in which people connect to opportunity."
- LinkedIn exec Ryan Roslansky: "Imagine being a job seeker and being able to instantly know what skills are needed for the available jobs in a desired city, like Denver, and then to be prompted to take the relevant and accredited course to help you acquire this skill."
- Other recent LinkedIn acquisitions: Refresh (meeting preparation app), Careerify (recruiting software), Bizo (business ad services), Bright (analytics-driven job search engine/listingplatform)
Apr. 2, 2015, 1:29 PM
- Refresh helps users prep for meetings by uncovering information about the people they're meeting with; the startup claims to have "surfaced insights associated with hundreds of millions of meetings." LinkedIn (LNKD +0.4%), of course, is often used for the same purpose via its profile pages.
- LinkedIn has bought Refresh for undisclosed sum, and says it plans to use the startup's technology to create new features; it's unclear if those features will go into new apps or LinkedIn's existing ones. Refresh's current app will shut down on April 15, and 12 of its 14 employees will be joining LinkedIn.
- The purchase comes two weeks after LinkedIn announced the acquisition of Canadian recruiting software startup Careerify.
Mar. 16, 2015, 5:00 PM
- As part of a broader Internet/cloud software stock coverage launch, Brean's Sarah Hindlian (formerly with Evercore and JPMorgan) has started LinkedIn (NYSE:LNKD) with a Sell rating and $208 target.
- Hindlian thinks expectations for LinkedIn's Sales Navigator social selling platform (now a large % of subscription revenue) are too high, and that the "browsability" of its core site is lacking. "While we note that LinkedIn has a valuable asset — its database of global professionals and their respective networks - we fear attempts to monetize it could be more limited than investors may realize."
- She argues LinkedIn's aggressive efforts to boost engagement via its messaging platform (InMails), publishing platform, and other services are hurting the user experience, while failing to boost time spent on its site. "In the long term we are concerned that investors are comfortable comparing a sales user base to a talent recruitment base, noting that any successful loading of sales people onto LinkedIn is likely to significantly disrupt users, and therefore disrupt Ad Revenues."
- Her target translates to a 9x 2015E EV/sales multiple.
- LNKD -1.3% AH to $256.80.
- Earlier: LinkedIn buys Canadian recruiting software developer
Mar. 16, 2015, 2:34 PM
- LinkedIn (LNKD - unchanged) has acquired Careerify, a Toronto-based developer of recruiting software tools for businesses. Terms are undisclosed.
- Two of Careerify's products will be shuttered, but a referral product that helps companies find job candidates using their employees' social network contacts - it could complement LinkedIn's existing recruiting tools, which make heavy use of publicly-shared member data - will remain open to existing customers. No word yet on how LinkedIn exactly plans to leverage the product or its underlying technology.
- Careerify CEO Harpaul Sambhi: "We decided to join LinkedIn due to what we lacked – massive scale. More than 30,000 companies across the globe leverage LinkedIn for recruitment, and with more than 347 million members, LinkedIn offers an opportunity to make a much larger impact on job seeking and hiring."
- The purchase follows LinkedIn's 2014 acquisitions of business ad services firm Bizo (recently leverage to launch a new ad product) and job search engine/listing platform Bright.
Feb. 26, 2015, 10:07 AM
- As part of an Internet sector launch - it also includes Yelp, Expedia, and others - Morgan Stanley's Brian Nowak (formerly with Susquehanna) has launched coverage on LinkedIn (LNKD +2%) with an Overweight rating and $310 target.
- Nowak: "LNKD's earnings power is still underappreciated as our proprietary industry-level large enterprise analysis shows the Talent Solutions (TS) runway is still very long." He also declares LinkedIn's ad offerings (just expanded to cover 3rd-party sites) are "becoming the [Facebook] for professional advertising," and predicts additional top-line beats and margin expansion are on the way.
- Shares have made fresh highs. They're up 15% since LinkedIn posted a strong Q4 beat on Feb. 5.
Feb. 20, 2015, 5:37 PM
- LinkedIn Network Display, a new ad solution launched by the professional social networking giant, allows marketers to buy ads from LinkedIn (NYSE:LNKD) which are shown on 3rd-party sites, but which leverage LinkedIn's valuable profile data for targeting purposes.
- Advertisers can opt to target as few as 1K people, and be very specific about whom they're targeting - for example, a campaign could be run that only shows ads to software developers in the L.A. area.
- CNN and Weather.com are among the sites initially showing the ads, some of which could carry very high prices thanks to their focus on high-income demographic groups. The product has its roots in LinkedIn's $175M 2014 acquisition of business ad service provider Bizo.
- Facebook and Twitter have already begun using their user data to sell ads on 3rd-party sites/apps. LinkedIn is coming off a Q4 in which its ad sales (24% of total revenue) rose 56% Y/Y.
Feb. 6, 2015, 9:12 AM
Feb. 6, 2015, 8:04 AM
- Hiking his price target on the Buy-rated stock to $275 from $240, SunTrust's Robert Peck notes the easy earnings beat, guidance that's likely to prove conservative, continued strong growth in TAS, and Marketing Solutions outperformance.
- "We believe the most important takeaway from the call is management's level of enthusiasm and confidence in Sales Navigator heading into CY 15," says Piper Jaffray's Gene Munster, reiterating his Overweight rating and hiking the price target to $297 from $282.
- Credit Suisse lifts its PT to $331 from $285, and Evercore ISI boosts to $290.
- BofA upgrades to Buy with $320 price target.
- LNKD +9.5% premarket
- Previously: LinkedIn soars to $256 on Q4 beat, ad growth pickup (Feb. 5)
Feb. 5, 2015, 5:48 PM
- LinkedIn (NYSE:LNKD) is guiding for Q1 revenue of $618M-$622M (below a $645.7M consensus) and full-year revenue of $2.93B-$2.95B (in-line with a $2.94B consensus). However, the company has a long history of sandbagging sales guidance. Q1 EPS guidance of $0.53 is below a $0.55 consensus, but full-year EPS guidance of $2.95 is above a $2.73 consensus.
- Q4 Talent Solutions revenue (jobs, 57% of total revenue) +41% Y/Y to $369M; Marketing Solutions (ads, 24% of revenue) +56% to $153M; Premium Subscriptions (19% of revenue) +38% to $121M. Marketing Solutions growth accelerated sharply from Q3's 45%. International was once more 40% of total revenue.
- The deferred revenue balance rose 33% Y/Y to $522.3M. GAAP costs/expenses rose 44% to $629.3M; sales/marketing spend totaled $224.3M, and R&D $150.3M.
- LNKD +7.8% AH to $256.60. The all-time high for regular trading (set in 2013) is $257.56.
- Q4 results, PR
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